In accordance with the articles of association and the terms of the general managers' agreement the office allowance shall be revised after April 5, 1924, if my firm so require. We have refrained until recently from asking for a larger, allowance but in view of our heavy; expenses we were compelled to bring' up the question and at a meeting of the consulting committee held on December 13, 1927, an increase to Tis, 100,000 yer annum was sanctioned.
It is unnecessary for me to go into full details of the troubles and tthe political changes that took place during the early part of the y These matters are frosh in your memories and you will realize how] dificult it was to carry on our business in such circumstances. Early in January, there were signs} of agitation in our mills and from then until early May be lost approximately through strikes six weeks' work at Ewo Mills, five weeks at Yangtszepoo Mills and nine weeks at Kung Yik Mill.
After the cessation of the strikes, in view of the turbulent state of} the country and the impossibility of disposing of our full production, it was considered necessary to go'on short-time working in several, sections of our Mills. This state of fairs continued throughout the remainder of the period but early this year we again increased our output, and I trust that no reduction in working hours will be necessary during the remainder of 1926.
Fair quantities of Chinese cottons of moderate quality were available Dut we brought large supplies of better grades from other countries. 'Until about a month sign, this year's! crop was of reasonably good grade! but, With increased prices, we see the'usual adulteration by water and seeds; much good cotton has been ruined by this fraudulent practice and. will' mean a heavy loss. to Chinese:; mexehants and to " mills generally. Unfortunately, no steps have yet been taken by the authori ties to put a stop to this scandalous] state of affairs.
The Excise Duty, During the summer the Nationalist Government endeavoured to in-grease excise duty on mills products} by figures varying from 600 per cent. to 900 per cent. but happily this new scale of charges did not come into effect, Our goods are, however, now paying 50 per cent. more dity than was the ease a year} ago. It is unfortunate that' the authorities "have not yet done anything to, foster the cotton mill industry, but I trust that, if they will do nothing to help, they will do nothing more to hinder mills in China which -provide work for so many thousands of China's popolation. Any increase of the import duty' on raw cotton or of the taxation of manufactured goods might well be disastrous, Following out our policy, we have continued. to add to our buildings and machinery where we thought} such steps were warranted and minor improvements are continually being made, Every attention is devoted to the upkeep of existing! machinery and, although much of! it has been running for many years it is, in some cases, better than} similar machines being produced to-lay.
With the arrival of the Defence Force in Shanghai we did everything in our power to fissist in accommo dating the British troops. For some months a number of soldiers foreshore at Yar lent for recreation purposes while the Ewo Club building and the adjacent ground, together with a piece of land on Jessfield Road were leased to the Defence Force at small] rentals.
Text read from the printed page and cleaned; old type leaves the occasional error.